Regenerate Asset Management completes first regenerative agriculture investment


Global AgInvesting | 16 February 2024

Regenerate Asset Management completes first regenerative agriculture investment
 
By Lynda Kiernan-Stone
 
Climate impact investment manager Regenerate Asset Management announced the finalization of its inaugural investment through its first-of-its-kind Regenerate European Sustainable Agriculture Fund (RESA Fund). 
 
Reinforcing its core mission to drive impactful and immediate environmental change while generating investor returns, the fund is making a significant investment of €40 million to create a scaled blueberry business in Central and Southern Portugal that will be newly launched under the name Regen Blue. 
 
Formed last year with a €150 million cornerstone investment from M&G Catalyst , a £5 billion flexible private market strategy making purpose-driven investments in innovative solutions to some of the world’s greatest environmental and social challenges on behalf of the £129 billion Prudential With-Profits Fund, the RESA Fund is a pioneering investment platform offering exposure to a novel asset class which provides real asset diversification, has the potential to drive long-term positive climate impacts, and acts as a hedge against inflation. 
 
“Regenerate’s mission aligns perfectly with our objectives to invest where we can make the biggest difference – and in this case the end goal is sustainably produced food,” said Niranjan Sirdeshpande, global head of investments, M&G Catalyst.
 
“Our investment will enable Regenerate to add value through regenerative agriculture in a way that generates market rate private equity returns for investors, while also delivering positive science-based environmental impact on the planet. We are proud to play a role in Regenerate’s mission to drive environmental change in Europe.”
 
 
 
Berry Bright Future
 
The health and wellness trend so strong among consumers, combined with the desire for on-the-go natural snacks, has made the berry category one of the fastest-growing in the Western European fruit and vegetable market, and a focus for investment.
 
Consumer demand for fresh berries is strong due to the combination of their health benefits, appealing taste, versatility, and their alignment with current dietary and culinary trends. And as consumers increasingly seek both convenience and nutrition in their food choices, fresh berries continue to be a popular and highly sought-after option.
 
Between 2022-2027, Technavio forecasts that the global fresh berry market will maintain a CAGR of 5.69 percent and increase in value by US$10.2 billion while the degree of fragmentation in the industry decreases over that time period.
 
In the case of Regen Blue, this partnership with Regenerate will build upon the foundation of a successful small-scale business, adding new approaches that will take the operation into the future. 
 
“The existing management team has already established a fantastic small scale sustainable blueberry farming business, our investment will build upon this high-quality foundation and turbo charge profitability,” said Cameron. “Regen Blue will expand operations and layer new approaches to production which will boost the quality and productivity of the soil, minimize costly external supplies such as fertilizer and ultimately create a circular farming business.”
 
Goals for the Regen Blue project being supported through this investment include:
 
~ Expanding the farm’s approach to regenerative practices that will build upon its core business of blueberry farming. 
 
~ Plant additional tree crops to improve biodiversity and soil health. 
 
~ Support the existing sustainable farming management team with further climate and investment expertise from Regenerate. 
 
~ All elements of the regeneration plan will be baselined, monitored, and reports in accordance with Regenerate’s methodologies on a single platform covering all sites. 
 
~ Scale the business to contribute to the economic growth of the local community while boosting local employment. 
 
“This investment marks a seminal moment for Regenerate on our mission to direct return-seeking capital at scale to solve social and climate issues,” said Ryan Cameron, chief investment officer, Regenerate.
 
“In this way, our approach to farming is hugely appealing from both a climate and investor perspective where impact delivers returns in regenerative agriculture. Regen Blue is a great example of how we bring together high caliber investment principles with our specialist regenerative agriculture expertise, allowing us to acquire farming businesses transforming both the scale and diversity of existing operations to reach new heights.”
 
 
Jesper Jensen, CEO, Regen Blue commented, “Regenerate immediately understood our mission and supported our management needs to deliver the growth of the business. We’re really looking forward to working with them to grow and diversify the business further with the benefit of the latest regenerative agriculture lessons from around the world.”
 
“Our local community is proud of what we do here – it will be great to support the prosperity of our community further with the expansion of the business with this substantial investment.”
  •   GAI
  • 16 February 2024
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